According to the author of this article, gold right now is a better place to put one's money than in stocks. He believes that gold will have a near-term period of out-performance relative to stocks and also believes that most of gold's weakness has passed and that the metal may have hit its bottom.

"Action is at bottom a swinging and flailing of the arms to regain one's balance and keep afloat." - Eric Hoffer

I've written several pieces on gold in the past and have been making the argument that it likely will participate in the 2012 reflation theme, but not to the same extent as equities this time around. Both gold and stocks can do well when inflation expectations are rising, but I suspect there is much more room for stocks to rally relative to gold over a longer period of time as money re-allocates away from low yielding bonds to chase capital appreciation. I believe that this will likely begin in what I have termed the "Spring Switch" following the Summer Crash, Fall Melt-Up, and Winter Resolution writings.

Of course, recent market action indicates the opposite. I noted in my past couple of columns that I believe we are in the midst of a mini-correction here, but that it likely would not be as deep as many seem to be thinking.

I sent out a tweet to followers of my company (@pensionpartners) on Thursday stating that our ATAC (Accelerated Time And Capital) models flipped to risk-off, as we largely removed our equity holdings for our clients and repositioning into bonds for a short-term trade. None of this changes the 2012 40%-plus-like move I believe is a high probability. If the pullback is indeed shallow, it likely will re-awaken animal spirits in stocks as money accelerates into risk.

Gold seems to now be at a juncture where in the very near-term, it could be a better place to put money to work than stocks. Take a look below at the price ratio of the SPDR Gold Trust ETF GLD -0.02% relative to the Dow Jones Industrial Average DIA +0.65% . As a reminder, a rising price ratio means the numerator/GLD is outperforming (up more/down less) the denominator/DIA.

There are several things to note here. First, gold substantially outperformed the Dow starting around late January 2011, and spiked significantly in August as the Summer Crash unfolded.

However, the move was too sharp (and correlated too highly to Treasuries at the time), indicating a reversal was likely, particularly as hedge funds heavily weighted in gold had to raise money to meet margin calls in the midst of the volatility. September resulted in serious weakness for the precious metal, and the ratio has now completely undone the alpha/outperformance generated during the Summer Crash.

I've drawn in what could be a ratio resistance line, and do think that gold now may stage a near-term period of outperformance relative to stocks. I still maintain the idea that the better way to play reflation for the year is through equities, but for those looking to be more nimble, a good amount of gold's weakness may now have passed. A near-term relative bottom against stocks may now be in place.